Emotions choose the home. Reason chooses the loan
· Plamena Toteva - DSK Bank
The home remains the safest investment - but with a reasonable plan!
Could you introduce yourself in a few words - what is your professional path and how did you reach the position of Managing Director of "Mortgage Lending" at DSK Bank?
My career so far has been invariably linked to the banking sector.
My experience to date of about 20 years is entirely in the field of retail banking at two of the leading banks in the market, where I had the opportunity to go through various managerial positions. Today, I have the privilege and enormous responsibility to manage mortgage lending at DSK Bank, which is a market leader in the sector and in whose history it is exceptionally well represented. I find a lot of meaning, inspiration, and personal motivation in what I do.
The DSK Home platform has turned 4 years old and already has thousands of realized mortgage loans. What lies behind this success and what is the next step in its development?
The short answer is courage and vision to invest in modern and accessible mortgage lending from anywhere in the world.
Through DSK Home we invested in a solution that combines digital technologies with the expert support of our consultants. We are changing many standardized processes and providing transparency and predictability, which are leading in making the decision of which bank to trust for long-term lending for home purchase.
I am proud of the success of the colleagues who work on the project because we started working on DSK Home four years ago, and today we are already seeing sustainable results. More and more clients prefer to go online through the steps of loan approval. The approval time for a mortgage loan of 5 days is significantly shorter compared to our standard processes, and the level of satisfaction is significantly higher. The loans disbursed have already exceeded 4000.
Today, DSK Home is a complete ecosystem where clients can find their future home, receive professional consultation, and choose whether to go through the process entirely digitally or with the support of an expert from DSK Bank.
Our next step is an even higher level of digitalization. We are working on a new generation of the platform that will offer an even more convenient application process, online document exchange, and tracking of every step in real-time. An important focus is also our desire to automate information gathering, so we save clients time and effort in communicating with various institutions.
Photo: DSK Bank
Do you expect a real "calming" of the market by the end of 2026, and how will it look in different regions?
Predictions are for a gradual slowdown in the growth rate. With a current annual growth of 27% in mortgage lending, we expect it to be around 20% by the end of the year.
We will continue to witness active lending, and the reasons are clear – incomes are rising, the economic environment is positive, banks are offering favorable conditions, and more and more people are looking for higher quality and more spacious homes. This means that demand will remain active, albeit at more moderate rates.
However, the market remains highly concentrated – 40% of mortgage lending is concentrated in the capital, and about 75% – in the six largest cities. It is precisely there that the largest investments in new construction are realized, the most jobs are created, and incomes are rising the fastest. Therefore, we expect these markets to continue to be the engine of growth in the coming years.
I do not expect property prices to fall, but rather more acceptable growth rates and for us to continue to be among the leading places in the EU in terms of affordability.
Our forecasts are for a price increase of around 8.5% in 2026, and in the medium term (by 2028) - an average of about 8% per year, with slightly higher rates expected for Sofia.
How do you think the introduction of the euro has affected the behavior of buyers and investors in the first months of the year?
The first 6 months after our accession to the eurozone largely confirmed our expectations for the market. We do not observe a sharp jump in demand or prices, but rather more rational behavior on the part of buyers.
An increasing share of transactions are made by people who buy a home for personal use, rather than for investment purposes or because of expectations that the introduction of the euro will automatically lead to a faster increase in property prices.
We also see another distinct trend. After years in which a large part of purchases were financed with personal savings, more and more clients are choosing mortgage lending to acquire a higher quality home and a better standard of living without delaying the purchase. This trend is clearly visible in the statistics – since the beginning of the year, over 65% of transactions in Sofia are made with a mortgage loan, while in large cities, their share has already exceeded 45%.
Mortgage interest rates in Bulgaria remain among the lowest in the EU - to what extent is this a key stimulus for the market?
Low interest rates remain one of the main factors supporting the activity of the mortgage market in Bulgaria. The average interest rate on new housing loans is around 2.5%, compared to an average of about 3.4% for the eurozone. This once again places the country among the most affordable markets for mortgage financing in the EU.
This is supported by the growth of wages above the level of inflation
and low unemployment.
Over the last decade, interest rates in our country have been steadily decreasing – from around 9% in 2010 to current levels, which has significantly improved housing affordability and made the market more predictable.
If we compare regionally, in Sofia, purchasing a home of about 70 sq.m requires approximately 7 gross annual salaries, while in the capitals of Central and Eastern Europe, an average of about 11 are needed.
Data shows that two-bedroom apartments and new construction remain the most sought after. How do you explain this trend?
The trend is completely logical and follows the life stage and needs of buyers. When purchasing a first home, two-bedroom apartments are most often chosen because they offer the best balance between price, functionality, and affordability.
Over time, as incomes rise and families expand, some buyers turn to larger homes. Factors outside the home itself are becoming increasingly important – infrastructure, services, green spaces, and overall living environment. This explains the increased interest in modern residential complexes with additional amenities.
Another key factor is the structure of the housing stock. Bulgaria remains among the countries with the highest degree of overcrowding in the EU – about 34% compared to an average of about 14% for the eurozone, which naturally supports the demand for more spacious and functional properties.
At the same time, new construction dominates the market. Nearly 40% of transactions are for buildings put into operation in the last year, as buyers seek modern standards – better energy efficiency, higher quality of the environment, and better functionality. This makes new projects a preferred choice over the aging building stock.
There is also strong demand for standalone houses and properties in gated complexes on the outskirts of large cities. This type of housing offers a different standard of living, more space, tranquility, and proximity to nature, which continues to be highly valued by many families.
What is the average loan amount currently and how is the financial profile of the client changing?
The average size of mortgage loans is increasing, reflecting both the dynamics of the property market and the increase in household incomes. Today, the average size of a mortgage loan at DSK Bank is around 140,000 euros, reaching 180,000 euros in Sofia. It is important to emphasize that about 90% of mortgage lending is directed towards purchasing a home for personal use. This means that the market is primarily driven by real housing needs. When we talk about affordability, it is important to consider both the size of the loan and the development of incomes. The average gross income of our clients when applying for the first months of 2026 is around 3100 euros per month, and in Sofia – nearly 4000 euros, which is a significant increase compared to previous years. With an average loan of 140,000 euros, the monthly payment is approximately 553 euros, and with 180,000 euros in Sofia – about 711 euros. As a result, clients allocate an average of about 35% of their incomes to service their obligations. This is within good international practices and gives us confidence that credit growth is based on real solvency and stable economic fundamentals.
More and more young people under 30 are buying their first home. What distinguishes them in terms of behavior? What are their most important criteria?
Yes, we are observing increasingly active participation of young people under 30 in the housing market. What distinguishes them is that they make their financial decisions much more informed and much earlier in life compared to previous generations.
For them, purchasing a first home is not just an emotional decision, but part of a long-term financial plan. They thoroughly research the market, compare different offers, use digital tools, and expect a fast and transparent process from the bank.
The most important criteria for this group are the affordability of the home, the predictability of the monthly payment, and a good location. We are increasingly seeing strong interest in the energy efficiency of properties, the quality of the living environment, and opportunities for remote work.
Another characteristic is that young clients seek flexibility. They want solutions that can adapt to different stages of their lives – starting a family, career development, or changing their place of residence. From our perspective, this is a positive trend. These clients usually have stable employment, rising incomes, and higher financial literacy, which allows them to plan more confidently and make sustainable decisions for their future.
What is your focus – volume growth, portfolio quality, or long-term sustainability?
If I have to rank the priorities, I place the quality of the portfolio and long-term sustainability first.
DSK Bank is a market leader with over 27% market share, with every third new mortgage loan granted by us in recent months. This position is not the result of a desire for growth at any cost, but rather a consistent policy of responsible lending. If we assess that a given client will not be able to service their loan in the long term, we will not approve it.
This is what creates trust. Clients choose DSK Bank not only because of competitive conditions but also because they receive expert consultation at every stage – from choosing financing, through property assessment and legal verification, to loan disbursement. We add fast processes, digital solutions, and products that can be tailored to the specific needs of the client.
As the Managing Director of "Mortgage Lending", how do you define your leadership style? How do you motivate your team?
Every success of mine is the result of hard work, high goals, persistence, resilience, and energy for new knowledge and growth. In my opinion, there is no stronger motivator for the team than personal example, clear direction, objectivity and transparency in communication, and recognition of each person's contribution along with good attitude and support.
How do you select people for your team – what qualities are essential?
In recent years, I have been fortunate to build a team of professionals with diverse expertise and responsibilities. Recently, the structure I manage celebrated its third anniversary and achieved the goals we had set. At that time, I realized that the greatest satisfaction comes from the results of the people I work with. What I didn't tell them is that this success gave me the confidence that after all these years of experience and challenges, I have learned to make the right choices. The best proof of this is their contribution, motivation, and desire to achieve successes together and also to find time to celebrate them.
If I had to summarize the qualities I seek, they are trust and loyalty to the team and the organization, attention to the quality of work, a desire for development, and a willingness to help a colleague when needed.
I believe that business expertise is built through practice, good leadership, transparent communication, mentorship, and personal motivation. Today, AI makes access to information much faster, but it cannot replace the attitude towards work, the ability to adapt to change, and resilience. These qualities will continue to distinguish successful teams.
What is the most difficult management decision you have made in recent years?
This answer is a continuation of the previous one – the most difficult decisions for me have always been related to people, when I balance the responsibility not only for business results but also for managing effective teams and the values of the organization. They never become easier, but experience teaches you how to make them with more clarity, empathy, and responsibility.
How will mortgage lending look in 5 years?
My short answer is: much easier and more accessible – entirely online or hybrid with the support of a consultant, without the need for the client to visit institutions to gather documents. In mobile banking, the client will be able to track all expenses and services related to the property.
If you had to send a message to people who are currently considering buying their first home - what would it be?
Here, I cannot step out of my shoes as a banker and not share that a mortgage loan should primarily be a means to purchase a property in which to live and improve your quality of life. And if that is the case, in my opinion, there is no reason to delay the decision, especially when there are good prospects for incomes and the possibility for them to cover monthly payments and associated costs.
Buying a home is one of the most important decisions in life and is often highly emotional, but purely humanly, I would advise clients not to rush into emotional decisions. A home is something desired, but the loan behind it is a long-term responsibility that requires realistic planning for the future, not actions driven by fear.
That is why I always encourage clients to seek consultation even before they have chosen a property and to take advantage of the opportunity for pre-approval. It is free and provides clarity on what resource they can obtain based on their incomes and credit history, which makes the search more focused and secure. The final loan amount is determined after a market assessment of the specific property.
It is important for people to keep in mind all associated costs – notary and state fees for the mortgage, broker commissions, local tax upon acquisition, furnishing costs, as well as ongoing monthly or annual expenses related to the property. When these elements are clear in advance, the decision to purchase is more informed and sustainable.